PETALING JAYA: A group pushing for EPF withdrawals has questioned the government’s decision to let people use their retirement savings to support loan applications.
Pertubuhan Gagasan Inovasi Rakyat Malaysia said many from the middle 40 (M40) and bottom40 (B40) segments may not be able to meet the conditions for the EPF Account 2 Support Facility (FSA2).
The facility is targeted towards EPF members who have at least RM3,000 in their Account 2 and are supported by a reasonable income to ensure they can afford the financing.
The group’s president, Azmi Tahir, said many people have already dipped into their Account 2 to pay for their housing loans and children’s education.
“They’ve used it all up, so what balance will they have left?” he asked.
He told FMT the group believed permitting withdrawals would be more beneficial for those in desperate need of funds as there will be fewer strings attached.
Since 2020, some 8.1 million EPF members have withdrawn RM145 billion from the retirement fund under four separate schemes to help people cope with the impact of the Covid-19 pandemic.
Prime Minister Anwar Ibrahim has said the government will not allow any more withdrawals as savings have dwindled. He proposed the FSA2 as an alternative.
Currently, 6.7 million people have less than RM10,000 in their EPF accounts, compared to 4.7 million in 2020.
Azmi said instead of the FSA2, the government should allow selected account holders to withdraw all their savings from Account 1.
He said the scheme should allow withdrawal by account holders in their late 40s and early 50s who have not been able to find employment after losing their incomes when the pandemic shut down the economy.
“They may have worked for years but may have been retrenched. They may find it difficult to get another job due to their age and health.”
These people have depleted their savings and still cannot get back on their feet despite the reopening of the economy, Azmi said.
“There are also those who are no longer active contributors. We ask that they be allowed to withdraw all their money and for EPF to consider them as having reached 55 years of age”.
Azmi said this group of people needed money to put food on the table now. They may not be able to wait until they reach retirement age.
He said EPF can determine who needs to access their savings on a case-by-case basis to prevent those who were not experiencing financial hardship from withdrawing their money.
Source: https://www.freemalaysiatoday.com/category/nation/2023/04/12/group-doubtful-epf-loan-scheme-can-help-m40-b40/